Wednesday, December 5, 2007

Ooops I am not the only person laughing :))

Assetz laughs off UK property struggle 'fuss'

"The average house price will grow, interest rates will drop and rents will climb in 2008, according to Stuart Law, chief executive of property investment firm Assetz." "If people look at the fundamentals it is actually very hard to find out what all the fuss is about” My answer is simply UAAHHAHHA

Posted by confused76 @ 09:14 AM (1184 views)
Please complete the required fields.



11 thoughts on “Ooops I am not the only person laughing :))

  • Confused – was Stuart Law possibly Hans Christian Anderson in a former life (LOL)

    Reply
    Please complete the required fields.



  • If the government’s plans to build new homes show little sign of being implemented, then what about the high rise flats being built at the end of my road on the site of a former multi-storey car park, or the ones further down on the site of a former night club, or the ones that are going to be built on the site of a derelict shopping centre, or the ones being built on the old bus station?

    Reply
    Please complete the required fields.



  • Stuart Law needs to be reminded of his duties as a CEO. Primarily it is to provide the best possible return for the shareholders of the company. If you take a look at Assetz, you will clearly see this is not happening. This is a desperate and belated attempt to paper over the cracks. Property investment is a failing industry and everyone can see it.

    Reply
    Please complete the required fields.



  • An interesting article, does anyone here agree?

    Reply
    Please complete the required fields.



  • converted lurker says:

    I picture ickle Stewie Griffin when I conjure up images of Stuart, a child playing big boys games. Let’s not lose focus at what Assetz primary function is; to push gullible ‘investors’ into buying off plan or new build investments in the delights of; Bulgaria, Poland and the newly discovered Crackwhoreovia. Unlucky Stuart, there’s always Herbal Life to flog ;¬)

    Reply
    Please complete the required fields.



  • There comes a point where being upbeat about your interests starts to look stupid.

    Reply
    Please complete the required fields.



  • “Fiddling”, “Rome” and “Burns” come to mind…

    Reply
    Please complete the required fields.



  • not even worth commenting on really

    Reply
    Please complete the required fields.



  • crash bandicoot says:

    “Already buy to let mortgages are now 0.3% cheaper than homebuyer mortgages due to the perceived better quality of borrower,”

    You always get a much nicer class of people in the BTL camp!

    Reply
    Please complete the required fields.



  • crash bandicoot:
    For an amateur BTL landlord buying just one property, it makes sense for the bank to offer a better rate – provided that the loan is secured against the landlord’s own house too. I do actually feel sorry for the last batch of suckers who get caught up in the BTL mania and end up losing their own home too.

    Reply
    Please complete the required fields.



  • Hi Chaps

    Whilst I understand where you are coming from as members of a house price crash forum you are responding emotionally rather than based upon any facts. My article full content is below and contains detailed facts regarding the stability and even strength of the UK housing market that I would welcome debate upon as you never know, you may contribute a valid piece of data to the overall fundamental analysis and that would of course be welcome as our role is to crystallise all available data and provide this as a view to our clients. Our comments are not hype, merely a listing of market data. Calling the peak of negativity/sentiment is calling the best time to bottom pick low-bidding any distressed sellers and as an investor seeking lowest price in order to get best yield that is a good strategy to have.

    And for clarification our primary role is to source a mixed portfolio for clients – Bulgaria – no – have not recommended for investors for quite a while now, other than Sofia. UK off plan – yes has a place and rents are rising and even the RICS confirms flats are where the best rental growth will be next year. The majority of product investors should be adding to their portfolio is strong rental income product that can pay off its own mortgage and that you will never sell, therefore why does the price action matter. Rents are rising and as predicted the first rate cut came before Christmas so thinks look good for investors. I would not agree with some commentators that base rates are going to 4% but 5% is near certain by September next year.

    It would be nice of you to confirm if you are a renter or a homeowner if you respond to this post as it perhaps indicates your vested interest.

    Article below and let the best analyser of the market win…

    ====================

    The Truth About The Property Market and House Prices Today

    As Warren Buffett (the world’s acknowledged most successful investor) said : “Be greedy when others are fearful and be fearful when others are greedy”.

    Quite clearly there is so much talk in the press at the moment about there being a property market problem that people are actually beginning to believe it and are fearful, but professional property investors should ask themselves the following questions :

    * Are property prices likely to go up or down in 10 to 15 years time? Reasonable people expect good growth over this longer timeframe and professional investors generally take this length of investment view – short-term price wobbles are meaningless over this timeframe.

    * Are house prices going up or down in the short term? Average house price growth across all of the indices is between 8% and 9% over the last 12 months. Even the rather volatile monthly figures announced by mortgage lenders and other indices over the last few months still average around 5% growth per annum annualised. With buy-to-let investors only having to put 15% deposit in, even 5% growth is a 33% return on equity. Consider all the other factors below and you will struggle to find any valid reason for house prices to lower even in the short term, but there will always be deals to do and forced sellers during these few months of uncertainty – act before this period draws to a close and vendors become more confident again.

    * Are interest rates going up or down? Everybody close to the market fully expects bank base rate reductions of around 0.75% over the next 12 months – professional investors using base rate tracker mortgages can expect substantial mortgage cost reductions over coming months and payable rates of around 5% are likely.

    *I’ve heard bank base rates may drop but mortgage lenders won’t drop their loan costs? This could well be true on variable rate mortgages and unsecured loans and credit cards. However if you’re on a base rate tracker or selecting a fixed rate mortgage, there is still plenty of competition in the marketplace and this will increase dramatically in the spring, keeping mortgage rates very competitive. Base rate trackers will drop exactly in line with Bank of England rate drops, just don’t leave yourself on a variable rate mortgage. It is true that some lenders, like Northern Rock and Paragon, relied heavily on LIBOR interbank lending and this rate is quite a bit above Bank of England rate, but only a few percent of all mortgages are based on LIBOR so when Bank of England rates drop you will see reducing mortgage costs.

    * Are buy-to-let investors a better bet for the banks than homebuyers? Clearly they are as buy-to-let mortgages are now around 0.3% cheaper than comparable homebuyer mortgages – this is a result of buy-to-let investors having a lower default rate and being more financially stable according to the banks and their lending data.

    * Are rents likely to go up? In fact they already are according to the RICS, ARLA and Paragon surveys – RICS went as far as to say rents on flats are likely to grow more than any other property type over the next year or more. London rents are already at 15% and, as usual, this is likely to be preceding significant growth in the rest of the UK regions and is a sign of things to come.

    * What fundamentals are driving rental growth? First-time buyers have dropped from over 20% of the market to less than 10%. At the same time, homebuyers are buying in less volume but still at a greater rate than property coming on the market. This represents a substantial number of people switching from buying to renting with a disproportionate number of smaller households in the form of frustrated first-time buyers and this is leading to substantial growth in rents in the smaller property market like flats and terraced property.

    * Is there undersupply of property or oversupply of property? Clearly it can’t be both yet press headlines talk about both daily. There are local variations and also there is a difference between homebuyer products and rental product. The government clearly thinks we are massively undersupplied at 180,000 houses a year approximately being delivered where as they have a target of 240,000 a year, and an influential lobby group is trying to get this raised to 270,000 a year. The reason for this is there is a genuine massive undersupply of property in the UK. The talk of oversupply has referred mainly to rented flats in city centres and what is becoming clear, with rents rising and letting agent saying they don’t have enough property, is that this oversupply was extremely minor and due to the sudden reduction in property buyers generally and first-time buyers in particular, it would appear the country is relatively quickly swinging into undersupply of even city centre flats following a relatively minor increase in rental demand so far boding well for rental growth in the future. If it has not happened in your town yet it will soon, or perhaps your letting agent hasn’t tried or you haven’t asked. Try it and see what happens.

    * Is inflation under control? The Bank of England targets inflation (of 2%) with interest rates and if inflation rises substantially above 2% interest rates may rise. Tesco announced this week that food price inflation is overstated and competition between the supermarkets will keep this under control, oil prices are now dropping and inflation average for the last three months is bang on target at just below 2%. Clearly interest rates can now lower following a sharp fall in inflation over the last few months and this is what is forecast to happen as soon as this week.

    * Is population growth, fed significantly by immigration, likely to continue and hence support house prices and house price growth? Government figures suggest the population will grow by 4.4 million by 2014 – that represents an enormous extra demand for housing when there is already a shortage/backlog. We all know how accurate government figures are on immigration recently and this estimate is likely to be an understatement. More demand equals higher rents and higher house prices. Recent estimates suggested that the UK population could grow from 60 million up to 90 million over the next few decades and there is little chance of keeping up with housing supply if this turned out to be the case. Talk of reducing immigration by politicians is merely election spin as they fully know the benefit of immigration to the UK economy – also look around and see how the majority of immigrants are from Europe (versus the rest of the world) and it’s pretty clear that considering we cannot really stem immigration from Europe (under EU Law) that any immigration controls won’t really affect things very much.

    * Are developers increasing the supply of property or reducing it? This may seem like a strange question but the credit crunch has made developer finance harder to achieve and a slowdown in numbers of purchasers combined with this has resulted in many developers mothballing schemes and planning to come back to them in a few years’ time. Far from government hopes that house supply will increase, it would appear that it is actually going to be decreasing over the next few years, again supporting rents and house prices – unless the Bank of England savagely cuts interest rates and introduces more liquidity into the banking system. Any developers in the middle of the scheme are beginning to offer exceptional but temporary discounts and it will be necessary to move quickly to capitalise on these.

    * Do we actually need house price growth in the short term to make property returns? Normal homeowners who do not need to move home will just sit put, however developers need monthly cash flow and their banks will apply pressure to make sure they achieve it. This is going to result in substantial discounts available from developers below current market valuations, meaning a buyer is already making money without the need for the property to go up in the short term. In addition, some homeowners need to move house and may need to do deals, plus some long-established landlords use property sales to generate their retirement income and will be doing deals. Clearly with all the above factors you are unlikely to lose much money in the short term and next to no chance in the medium term.

    * Should I be buying with all the bad news in the press? Now that you’ve asked, and had answered, all of the above questions, can you think what the bad news people talk about actually is ? Is there indeed any real bad data or is it just bad sentiment ? Or indeed is it, in fact, good news for property investors and new homeowners alike? Rents are rising and a short-term opportunity exists to be “greedy while others are fearful” and buy at much better prices than has been possible for a couple of years or so from forced sellers (some developers and people who need to move house very quickly). Buying cheaply in a strong rental market will significantly enhance yields for buy-to-let investors and allow mortgage costs to be covered relatively easily and relatively quickly.

    So think on, what are your answers to the above questions and can you think of any genuine negative factors? Let me know if you can, please.

    Professional investors in any market act against the crowd. If, like most people, you’ve ever bought and sold shares, you probably found yourself buying near the top and selling near the bottom – unfortunately it is natural human nature of buying when you feel good and selling when you feel most despondent. The real money is made when you sell when you feel good and most optimistic and buy when you feel pessimistic but it isn’t natural human nature. This is your chance to think like a professional investor and buy at the (temporary) bottom with a 10 to 15 year view of selling near the top and, what’s more, rents will pretty much cover your mortgage straightaway making this a ‘free carry trade’ as the city boys would say.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>